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Geoffrey Edelsten facing financial investigation

Ben Butler and Chris Vedelago

Geoffrey Edelsten is facing an investigation into his financial affairs in Australia amid allegations the disgraced businessman has been siphoning money from a secretive trust account despite declaring bankruptcy in the United States.

The Sunday Age can reveal Melbourne lawyer Leon Zwier will spearhead a move to have Mr Edelsten’s US bankruptcy proceedings recognised under Australian law in an attempt to take control of millions of dollars' worth of property, luxury cars and shares he allegedly owns here.

Mr Zwier, a partner at Arnold Bloch Leibler, is one of the country’s top lawyers with a client list that has included late billionaire Richard Pratt, controversial Sydney businessman Trevor Kennedy, and cancer victim Rolah McCabe, whose estate fought a David-and-Goliath battle against British American Tobacco.

On August 8, a Florida bankruptcy judge took the unusual step of allowing the US-based independent trustee overseeing Mr Edelsten’s estate to appoint a representative in Australia to handle legal action on its behalf.

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Mr Zwier declined to comment. But it is understood he will soon file an application against Mr Edelsten in an Australian court to seize and sell off the assets inside a secretive trust.

Mr Edelsten, who has transferred control of the trust to two long-time friends despite a US court order, has admitted using the luxury apartments, high-end cars and cash held by trust, but denies he owns the assets.

More than $3 million has been allegedly misappropriated from the trust to pay off mortgages on Mr Edelsten’s Melbourne CBD penthouse.

Mr Edelsten declined to comment when contacted by The Sunday Age.

But the legal setback is believed to have sparked an incident that led police to attend Mr Edelsten’s penthouse early Monday morning, shortly after he returned from the Florida court hearing.

"After speaking to a man at this address, police do not believe there are any concerns for his welfare," a police spokesperson said. "For privacy reasons it would be inappropriate to comment further."